Crude prices fell yesterday as the world's leading exporter, Saudi Arabia, said it could quickly bring online spare production capacity if buyers needed more oil.

US light crude hit $56 (€43) a barrel, before ending at $54.55, down 84 cents. London Brent crude was down 58 cents to $54.39 a barrel.

US president George Bush met Saudi Arabia's crown prince Abdullah at his Texas ranch to discuss rising oil prices. Adel al-Jubeir, a foreign affairs adviser to Saudi Arabia's crown prince Abdullah, said world oil supplies were adequate, but that the kingdom was willing to provide as much crude oil as buyers wanted.

Saudi Arabia is currently producing "slightly over" 9.5 million barrels per day (bpd), with between 1.3 and 1.4 million bpd in spare production capacity that could quickly be tapped, Mr Jubeir said.

"The crown prince understands that it is very important ... make sure that the price is reasonable. A high oil price will damage markets, and he knows that," President Bush told reporters before welcoming crown prince Abdullah to his ranch.

Oil prices had risen since early last week, notching up gains of more than $4 and coming within striking distance of the all-time high of $58.28 set at the start of April as speculative funds surged back into the market. Those gains had been supported by a spate of refinery problems that has raised fears that refineries may struggle to meet rising demand.

"There's really not a crude oil shortage," Tim Evans, analyst at IFR Energy Services, said of crude stocks that have risen to the highest level in nearly three years.

Gasoline futures traded as high as $1.69 cents a gallon, after falling after the Saudi comments to $1.651.

High OPEC crude supplies have done little to calm fears of a gasoline shortfall this summer and a shortage of heating fuel at the end of the year.